CONTRACT

• A building contract is an agreement under which a contractor

undertakes the execution of construction work for certain
payment from an employer.
• Indian contract act, 1872, defines the contract as
• only those agreements are contracts which are enforceable as
such
• i. having been made by free consent of parties.
• ii. By persons competent to contract
• Iii. For lawful consideration.
• Iv. which are not expressly declared to be void by any statute.
• It is executed on stamp paper as prescribed by Indian stamp
Act-1899. and must signed and sealed in case of contract by
public bodies. Unstamped documents cannot be admitted in
evidence before arbitrator or court.
• General principles of contract :- The contract by private party
is executed by signing the necessary contract document
whereas in case of public bodies the same should be made
under their respective seals.
• 1. The seal of the authority must be affixed by those persons
who are authorised to do so.
• 2.The instrument operates at once as soon as the seal is affixed.
• 3.The seal should not be affixed carelessly and indifferently.
• 4. The seal shows that every member is bound and authorised
to do so.
• The contract becomes void due to
• 1. Misrepresentation
• 2. Fraud
• 3. Mistake
• Types of Contract :-
• There are two type of contract
• 1. Where quantities form the part of the contract:- in this
case the contract is to execute the works as shown on the
drawings and described in the bill of quantities. The rate of
items of works are binding and form one of the foundations
of the contract. The works are usually measured item wise
and are priced as per the rate given in the bill of quantities.
• 2. Where the quantities do not form part of the contract
(lump sum):- the special condition and specifications of the
works form an essential part of the contract. The contact
document in this case will consist of Article of agreement,
conditions of contract, drawings (structural drawings and
other details). General specifications, special conditions and
specifications.
• The contractor is required to submit an item wise estimate
showing as how he has arrived at the lump sum amount of the
contract but the same is not a part of the contract.
• This form of contract always result in extra works and dispute.
The extra works can be measured, they will be priced at the
rates submitted by the contractor before commencement of
work. If the same are not agreed upon, then the reasonable
and fair rates given by the architect for the extra work will be
final and binding. Where it is not possible to measure extra
works the contractor is allowed day work prices.
• DISCHARGE OF CONTRACT.
• There are four ways in which a contract can be discharged
• 1. By agreement
• 2. By performance
• 3. by being excused by law from performing it
• 4. By breach
• CONTRACT DOCUMENT:-
• two types of contract are popular in our country
• 1. Item rate contract:- incase of item rate contract the
contract document is to include
• i. Article of Agreement and General Conditions of the contract
• ii. Specifications
• iii. Bill of quantities
• Iv. Contract drawings ( drawings issued from the time to time
showing reasonable development of work will also form part
of the document)
• 2. Lump Sum contract:- in case of Lump Sum contract, the
contract document is to include
• i. Article of Agreement and General Conditions of the contract
• ii. Specifications
• iii. Special conditions and specifications
• Iv. A set of plans complete in every respect including structural
plans and plans of all other relevant details.
• The original of the contract document shall remain in the custody
of the architect. The architect has to supply one copy of the
contract document to each parties.. The contractor to be supplied
free of cost three copies of each of the plans, specifications and
other details. The contract document shall not be used for any
other purpose other than the work.
• Schedule of Quantities
• Schedule of quantities forms part of the contract document. It
indicate the intent of the work and approximate quantify of each
item of work. It assumes the form of contract bill, and part of
contract document.
• Rights of Employer
• a. to increase and decrease any of the quantities
• b. totally omit any item of work. The contractor is not to claim any
extras or damages for the same.
• Contract Drawings:-
• Contract drawings indicate dimensions, position and type of
construction. Figured dimensions are required to be followed. The
dimensions on large scaled drawings are to be supersede those
shown on small sized drawings.
• The express provisions of the clause pertaining to the contract
drawing will be
• a. any work indicated on drawings and not mentioned in
specifications or vice versa, such errors or inconsistencies between
drawings and specification to be brought to the attention of the
architect for correction.
• b. If the work is likely to be affected due to local condition, the
same to be brought to the notice of the architect.
• c. If the work is not as per the contract drawings and specifications,
the contactor to correct the same at his coat.
• d. The architect’s interpretations of contract document shall be final
• Contract Sum :- It is not permissible to adjust or to alter the
contract sum even if the same constrains mathematical error
unless both the parties agree.
• Ex. In an item rate contract , the contractor as shown one of
the items as under
• M.P tiles with T.W batterns 1000 sq.m Rs. 11.1 per sq.m =
111000 on checking the architect has corrected the total to
Rs. 11100/-. The work was entrusted to the contractor, who
subsequently pointed out that there was typing mistake. The
rate was Rs. 111 per sq.m. It is not permissible the architect
to vary the rates. It was the duty of contractor to write the
rates of items in words also, whereby the rates in words will
supersede the one in given in figure.
• Incase of Lump Sum contract if the contractor committed a
mistake, he has to suffer.
• Contract Bill :-
• The contract bills are known as bill of quantities that is priced
schedule of quantities. When inviting the tender the architect
usually issue schedule of quantities. If the schedule of
quantities shows the description of items(their quantities,
rate column, unit on which rates are to be based and total of
each item of work).
• The clause for contact may be provided that quantities are to
be worked out according to the mode of measurements of
building works based on ISI( Indian Standard Institution)
• i. where it is desired that a particular item should not be
measured as per ISI it will be compulsory to specify in the
contract.
• ii. Where ISI has not prescribed any mode of measurement for
any item of the work then the architect’s interpretation will
be binding on the parties.
• The quantity of work as shown in the contract bills will
supersede the quantity given in general specification.
• Architect’s Instructions :-
• The architect’s instructions are referred to as issue of further
drawings, details and/or written instructions, written
dimensions and written explanations.
• i. The architect has to give all instructions involving additional
financial burdens, variations in writing.
• ii. Oral instructions of the architect should be got confirmed( in
writing) by the contractor within seven days
• iii. If the contactor refuses to comply with the architect’s
instructions within seven days, the employ can carry out the
work at the risk and cost of the contactor.
• The architect while making use of his power under the
‘architect’s instruction’ must be honest, careful and impartial.
• The bill of quantities should be checked so as to correct any
mistake prior to commencement of the work.
• The works which are shown on the plan but not described in
the bill of quantities, the work with the permission of the
architect.
• Some times the employer gives instructions directly to the
contractor for extra works, these do not come under
‘Architect’s instructions’ unless the same confirmed by the
architect. If the contractor carry out the work at the
instructions of the employer the architect is not responsible
for the same.
• THANK YOU